Fannie Mae has done a much poorer job of maintaining and selling foreclosed homes in black and Latino neighborhoods than in predominantly white neighborhoods, several housing advocacy groups across the nation alleged Wednesday in a complaint to a federal housing agency.
Fannie Mae’s lax maintenance in some neighborhoods has disproportionately hurt property values and property taxes in parts of metro Atlanta and 33 other metro areas, said the Washington, D.C.-based National Fair Housing Alliance and 19 local organizations in Atlanta and elsewhere.
Fannie Mae, a quasi-government firm that insures mortgage lenders against losses when homeowners default on their loans, said it “strongly” disagrees with the groups’ claims.
Fannie Mae was swamped with millions of foreclosed homes in the wake of the 2007-2009 real estate market meltdown.
In examinations of more than 2,000 Fannie Mae-owned homes, the advocacy organizations said they documented problems such as broken windows, fallen gutters, dead animals, damaged doors and debris-strewn yards more often in minority areas than white neighborhoods.
“You can see the Fannie Mae property from a block away. They are the neighborhood eyesore,” said Ann Houghtaling, with HOPE Fair Housing Center in Chicago, which participated in the years-long investigation.
In their complaint to the U.S. Department of Housing and Urban Development, the organizations accused Fannie Mae of housing discrimination and violations of the federal Fair Housing Act.
In the Atlanta metro area, Fannie Mae-owned homes in predominantly black areas were about five times more likely to have multiple problems than foreclosed homes in white areas, according to the groups’ findings.
“We strongly disagree with these allegations and firmly believe they have no merit,” Fannie Mae said in an emailed statement. “We are confident that our standards ensure that properties in all neighborhoods are treated equally, and we perform rigorous quality control to make sure that is the case. We remain dedicated to neighborhood stabilization efforts across the nation, including with respect to our maintenance of foreclosed properties.”
Fannie Mae required more than $116 billion in taxpayer backing to stay afloat after the housing bust but has paid roughly $138 billion in dividends to the federal government.
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